Words: Ashley Rigg
Published: 7th October 2009
Dubai: Experts disagree on market future
Experts at Cityscape Dubai have failed to agree on the future direction of the property market.
Despite peak to trough price falls of nearly 50%, there is little consensus on when and how quickly the property market will recover.
Deyaar CEO Markus Giebel believes the market has bottomed out. 'Prices may go down a little bit more, but a 5% fluctuation is not important for the investment community. What is important to them is that prices will not fall 10%-20%. The question now is how long do we stay in the bottom and what does the recovery look like.'
However, JP Grobbelaar, Director of Colliers International, believes there is still a way to go before there is a substantial recovery in the market. 'We are going to see a false recovery. People are talking the market up and are very keen to see the market recover and will grab at whatever they can identify as green shoots to support their theory,' he said.
"However, I believe we are looking at further declines in rentals and property prices in the residential and office sectors. The road to recovery has got to be seen as something that will take a while”.
He believes the key problem that the Dubai market faces is the amount of supply due to come online. 'The fundamentals are not in equilibrium. The market will only recover when the fundamentals are in the right position. At this point the market is oversupplied,' he said.
Charles Neil, CFO of Landmark Properties has it about right when he says that it is 'a very fragmented market which has no clear picture and no clear direction'. Prices have come down substantially and the fundamentals of the region are strong in the long term but liquidity is low and the fears about over-supply could hold back the market for some time to come.
Full story on AME Info .
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